BBB targets Ultimate Electronics over ads after Best Buy suit settles

BBB targets Ultimate Electronics over ads after Best Buy suit settlesBest Buy has settled a lawsuit it filed against Colorado-based Ultimate Electronics, which operates in 11 states, over advertising claims the smaller chain could not substantiate.

The suit alleged that Ultimate Electronics made claims in advertisements that it had lower prices than its competitors and that it shops those competitors daily to insure it was indeed the lowest. The Better Business Bureau also took issue with Ultimate's claims and reported allegations of false advertising to the Federal Trade Commission.

The Better Business Bureau reports the advertising claims used include:

  • "Every day we shop ... Best Buy -- then adjust our prices to beat theirs, so you know we have the lowest electronics prices period."
  • "We adjust our prices daily. Contact your nearest store for the lowest prices period."
  • "We shop the competition so you don't have to."
Ultimate Electronics stopped making those specific claims and Best Buy last week withdrew the lawsuit. While changes apparently were enough to satisfy Best Buy, Ultimate's "lowest price" claims still run afoul of the Denver-based Better Business Bureau office.

In May 2007, the BBB asked the company to substantiate their advertising claims, but Ultimate Electronics did not comply and its failure to respond to these claims has resulted in an F rating, the BBB's lowest.

Despite concessions in the Best Buy suit, Denver/Boulder BBB President, Dale Mingilton said the F rating will stand. In a statement he added, "The BBB is still concerned that it states it has the lowest prices especially when the BBB in Minnesota found that oftentimes, their prices were actually higher than competitors."

BBB advises consumers not to trust lowest prices claims and to shop around to make these comparisons.

The current owner of Ultimate Electronics, Mark Wattles, who previously owned Hollywood Video, spoke with Consumer Ally about the suit and the BBB's allegations.

"As a result of the Best Buy complaint, the BBB requests a compilation of all our products compared to our competitors," Wattles told Consumer Ally. "My response was that we are a small company and we don't have the resources for that."

Wattles said the company still shops its competitors every day and adjusts prices accordingly, but he added that this has not been used in the company's advertisements since before Best Buy filed suit.

"Our position is that I don't know how we couldn't have the lowest prices," said Wattles. "The only thing we could do further [would be] to eliminate that campaign. I can't send the data to that point they want. We would have to hire 30 consultants."

"We listen to what consumers are saying and do what we think is in the best interest of the consumer," he said.

Increase your money and finance knowledge from home

Introduction to Economic Indicators

Measure the performance of the economy.

View Course »

Investment Strategies

What's your investing game plan?

View Course »

Add a Comment

*0 / 3000 Character Maximum